1/5/07 Purchased 100 bags of milk at #10.00k each
3/5/07 Purchased 60 bags of milk at #11.50k each
15/5/07 Issued 85 bags of milk
15/5/07 Purchased 180 bags of milk at #12.80K each
22/5/07 Issued 145 bags of milk.
Using simple average method, calculate the value of stock after 22/5/07
- #1,198.00
- #1,218.38
-
#1,257.67
- #1,408.00
The correct answer is: C
Explanation
| date | quantity | unit cost | Dispatch quantity | Balance |
| 1 | 100 | 10.00 | 100 | |
| 3 | 60 | 11.50 | 60 | |
| 15 | 85 | 75 | ||
| 15 | 180 | 12.80 | 255 | |
| 22 | 145 | 110 | ||
| 340 | 34.3 | 230 | 110 |
(34.3 / 3) x 110 = 1257.67
The value of stock is gotten by dividing the total unit cost by the number of times stock was purchased and multiplying it by the balance of stock at the end of the month or period.